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I'll just note that it doesn't seem like the SECOND mega deal for a player has worked out much to the team's benefit. ARod; Pujols; etc.

Sabathia isn't really on his second mega-deal. Part of his first mega-deal was an opt-out clause, and the Yankees re-signed him, adding a year to the original deal. So he's had more like one and a half mega-deals.

I proposed a while back that including opt-out clauses in long-term free agent deals could be beneficial for the teams, and many people around here suggested that I wasn't quite as bright as Dayton Moore. But I haven't seen anything to change my mind about that.

The key is for teams to have the intestinal fortitude to let the player walk after the opt-out comes up. If the Yanks had let Sabathia walk after the 2011 season, they would have gotten three years of Top Five Cy Young finishes for $69 million, and they could let someone else wonder if he'd hold his value through his mid-30s.

I proposed a while back that including opt-out clauses in long-term free agent deals could be beneficial for the teams, and many people around here suggested that I wasn't quite as bright as Dayton Moore. But I haven't seen anything to change my mind about that.

This is an odd time to mention it considering the Yankees would have been better off than they are now if the original Sabathia deal did NOT have an opt-out.

Sabathia isn't really on his second mega-deal. Part of his first mega-deal was an opt-out clause, and the Yankees re-signed him, adding a year to the original deal. So he's had more like one and a half mega-deals.

Fair enough.

The key is for teams to have the intestinal fortitude to let the player walk after the opt-out comes up. If the Yanks had let Sabathia walk after the 2011 season, they would have gotten three years of Top Five Cy Young finishes for $69 million, and they could let someone else wonder if he'd hold his value through his mid-30s.

I can follow that, and might even agree. But what gives me pause with the logic is: after Sabathia opted out, from the Yankees' point of view did it really matter whether he had already given them those years? At that point you are essentially deciding whether to sign a free agent pitcher with his profile. So whether he's been pitching for you for the last few years or for Pittsburgh shouldn't really matter, should it? The decision is the same in either case.

I can follow that, and might even agree. But what gives me pause with the logic is: after Sabathia opted out, from the Yankees' point of view did it really matter whether he had already given them those years? At that point you are essentially deciding whether to sign a free agent pitcher with his profile. So whether he's been pitching for you for the last few years or for Pittsburgh shouldn't really matter, should it? The decision is the same in either case.

If you can regularly get people to sign opt out deals and exercise the opt out you are probably in good shape. 5-6 year deals usually have a bad year or two in them, if you can get people on what effectively become 3 year deals you are going to benefit. For example;

With the shorter deals you avoid being hamstrung by a deal with dead years at the end. This assumes you land the big fish FAs when the time comes but even if you miss a year the world doesn't end (well, except if you're a Yankee fan suffering through a horrible 2013 when you might miss the playoffs by a couple of games).

And they'd be even better off if they'd let Sabathia go after he opted out.

Not necessarily. They would have gotten a better bargain on the original deal, but the best bargain for an individual player is not what teams (especially the Yankees) are trying to maximize or should be trying to maximize. For example, the Rangers' aggregate dealings Josh Hamilton would have been a better bargain if they didn't have him for $14 million for 2012, but they were definitely better off for having him on the team that year at that price. Ditto with the Red Sox and the last year of his contract with them.

The key is for teams to have the intestinal fortitude to let the player walk after the opt-out comes up. If the Yanks had let Sabathia walk after the 2011 season, they would have gotten three years of Top Five Cy Young finishes for $69 million, and they could let someone else wonder if he'd hold his value through his mid-30s.

The problem is that CC will only opt out, if he can reasonably expect to get a better deal. The Yankees would have loved to have had him back on the remainder of the original deal. That contract hat positive EV for them. Even if they don't want him, they can still trade him for value back. But by letting it walk out the door, they lose that value.

On the flip side, if CC can't reasonably expect a better deal as an FA (i.e. decline or injury), he won't opt out, and the Yankees are stuck with an albatross.

That's the problem with the opt-out from a team's perspective. You are essentially taking the full risk for the full X years of the deal. But if it turns out to have been a good bet, you only get the value from the first few years. Now it can still be a reasonable bargaining chip, if you can't get a guy to sign, or can get other things in return.

The player holds the cards. He will opt out if it's good for him to do so (and thus bad for you). And vice versa.

Where the opt-out can help a team is if the player (a) gives them great value, and then (b) opts out and signs with another team, and then (c) collapses. In retrospect that has helped the original team. But that's hindsight analysis; at the time of opt-out the team probably would have wanted to stick with the original deal.

If you can regularly get people to sign opt out deals and exercise the opt out you are probably in good shape. 5-6 year deals usually have a bad year or two in them, if you can get people on what effectively become 3 year deals you are going to benefit. For example;

So let's say after this season, the Dodgers come knocking at the Rangers, and offer to take Yu Darvish of their hands, for a bag of baseballs. The Rangers could just pocket those 2 good seasons of Darvish, and let the Dodgers have the remaining 4/41. Should the Rangers do that?

Where the opt-out can help a team is if the player (a) gives them great value, and then (b) opts out and signs with another team, and then (c) collapses. In retrospect that has helped the original team. But that's hindsight analysis; at the time of opt-out the team probably would have wanted to stick with the original deal.

Right, and if you have perfect hindsight, you can stick to the original deal, and replace b) with "trade him to another team for a pony".

The problem is that CC will only opt out, if he can reasonably expect to get a better deal. The Yankees would have loved to have had him back on the remainder of the original deal. That contract hat positive EV for them. Even if they don't want him, they can still trade him for value back. But by letting it walk out the door, they lose that value.

You are right, but the only monkey-wrench is that there is often a no-trade clause in these situations.

If there is NOT a no-trade clause (and no opt-out), teams basically always have the option to reap all of the bargain-ensuring benefits of an opt-out (for the reasons given by you), without the downside of losing a guy when they don't want.

Being LH definitely matters. Lefty throw slower on average, and can succeed with lesser velocity. 92 for a LHP is like 94 for a RHP.

It's certainly the conventional wisdom that lefties don't need as much "stuff" to be successful, but is there any really rigorous statistical analysis showing that to be the case? On an anecdotal level, it seems to be true, but we all know what that's worth...

Where the opt-out can help a team is if the player (a) gives them great value, and then (b) opts out and signs with another team, and then (c) collapses. In retrospect that has helped the original team. But that's hindsight analysis;

Exactly. An example of the same principal is Lincecum. If the Giants owned only 4 years of control instead of 6, it could have been better for them because they wouldn't have been on the hook for the past 2 mediocre seasons at big prices. But that doesn't mean it is better for teams to have 4 years of control than 6 years of control for players they draft/sign.

It's certainly the conventional wisdom that lefties don't need as much "stuff" to be successful, but is there any really rigorous statistical analysis showing that to be the case? On an anecdotal level, it seems to be true, but we all know what that's worth...

The Yankees drafted Cole back in 2008 out of high school, but inexplicably delayed in approaching him, leading Cole to decide on college instead.

I don't remember it happening like this. I recall them making him a significant offer and that he showed some interest in signing and then picking college at the last minute. The issue, IIRC, was drafting a kid who had made it clear before the draft that he wanted to go to college. I suppose it doesn't much matter how it happened.

It's certainly the conventional wisdom that lefties don't need as much "stuff" to be successful, but is there any really rigorous statistical analysis showing that to be the case? On an anecdotal level, it seems to be true, but we all know what that's worth...

Anecdotally:

1. LHP don't have the platoon advantage as much of the time as RHPs do. (Fewer LHB than RHB.) So that would seem to suggest that LHP need to be more talented than RHP to succeed, all else being equal.

On the other hand:

2. This is counter-acted by the fact that the LHP vs. LHB platoon advantage is greater for pitchers than the RHP vs. RHB platoon advantage.

Where the opt-out can help a team is if the player (a) gives them great value, and then (b) opts out and signs with another team, and then (c) collapses.

And thanks to the aging curve, this is often the case, isn't it? A typical marquee free agent comes on the market sometime around age 28-30 and signs a six- or seven-year deal. Opting out after three years puts the player in their early 30s at the time of the opt-out. Most likely, they will have already given the team the best years they're going to get out of the deal, but will also still be good enough that some other team will offer them a better deal than what they already have.

Look at it this way: A team signing a marquee free agent would virtually always prefer to have fewer years on the deal, right? If the Angels could, they would have signed Pujols to a five-year deal instead of ten. They don't expect those last five years of the deal to be worth the money they offered; it's just the cost of doing business. Giving Pujols an opt-out after five years has the potential to shorten the contract, and if he doesn't opt out, the team is no worse off.

Are there many "team opt-out" contracts out there? I recall Aaron Hill had one with the Jays, where Toronto had the opportunity to exercise club options for (making up the years here, I'm sure I've got some of the details wrong) 2010, 2011, 2013 and 2014, but they had to either exercise them all or decline them all in the winter of 2009.

Effectively an opt-out clause for the team. Technically I think it was described as an "opt-in" clause, but is there a practical difference?

So let's say after this season, the Dodgers come knocking at the Rangers, and offer to take Yu Darvish of their hands, for a bag of baseballs. The Rangers could just pocket those 2 good seasons of Darvish, and let the Dodgers have the remaining 4/41. Should the Rangers do that?

Oh hell no, because 4/41 is a terrific deal. Even if Darvish has 2 lousy years and 2 Darvish years he's worth his money. If he was sitting on 4/100 or something like that then it becomes pretty appealing I think.

Look at it this way: A team signing a marquee free agent would virtually always prefer to have fewer years on the deal, right? If the Angels could, they would have signed Pujols to a five-year deal instead of ten. They don't expect those last five years of the deal to be worth the money they offered; it's just the cost of doing business. Giving Pujols an opt-out after five years has the potential to shorten the contract, and if he doesn't opt out, the team is no worse off.

The way I look at it is, if the player has the ability to opt-out, and does so, and as the GM you are glad he has done so...then the only scenario in which that is true is one in which the player and GM have different assessments of his current value. Essentially, to argue that the team benefits from an opt-out, you have to argue that the player has an inflated sense of his own value. Which, knowing professional athletes isn't a bad argument.

But if he IS good enough and/or rampant salary inflation takes place, then they are worse off by him leaving.

He has to be good enough only over the first half of the contract. Even if he managed to be the Pujols of old for five years, the smart money would be on him declining in his late 30s. I don't think there's any realistic scenario under which the Angels would get good value for the last five years of that deal.

Even if he managed to be the Pujols of old for five years, the smart money would be on him declining in his late 30s. I don't think there's any realistic scenario under which the Angels would get good value for the last five years of that deal.

In that case, he would not opt-out and the Angels would gain nothing from having the clause in there.

In this case the team can trade the player and get back something in return.

Doesn't happen. Manny Ramirez played as well as could reasonably be expected in the first 4-5 years of his contract, and when they twice put his on waivers, not one team bit.

And given that no one bit, he would not opt-out because he knew other teams wouldn't match his deal. That is a case of the market undervaluing a player, not overvaluing him (which is what the post you quoted was referring to).

And given that no one bit, he would not opt-out because he knew other teams wouldn't match his deal. That is a case of the market undervaluing a player, not overvaluing him (which is what the post you quoted was referring to).

What I'm saying is no one trades for an old player at the end of a big money deal. The idea that they have trade value is foolish.

Yet, the Dodgers signed him for 2/$40M after that deal was over. It's strange, but it seems to be a market inefficiency.

An opt-out that gets a team out of the age 35+ seasons of a 7-10 year deal is going to be good for the team 95% of the time.

I always thought lefties don't throw as hard basically because there is so much emphasis on getitng left handed pitching, that you need to go deeper down the pool of available left handed pitchers than you do for right handed pitchers. If that makes any sense.

So I'd think the hardest lefties would throw just about as hard, but you're more selective right right handed pitchers than you are with lefties.

[42] Which is basically to say that they're rarer. It's sort of like the whole "why can't 7-footers shoot free throws" in the NBA. Well, they probably aren't any worse at it than any other height, but somebody who is 6'3" and can't shoot isn't getting into the NBA.

For example, the Rangers' aggregate dealings Josh Hamilton would have been a better bargain if they didn't have him for $14 million for 2012, but they were definitely better off for having him on the team that year at that price. Ditto with the Red Sox and the last year of his contract with them.

Hold on. I've read this a few times. I'm definitely mentally cloudy today, but what does the last "his" refer to?

So coming at it from the general naive position that all optionality in a contract should be at the time of its signing a completely fair (i.e. a 50/50 proposition for both parties, shouldn't a player option be essentially at a vastly lower rate than the guaranteed years?

He'll only take the option if he thinks it's a better value than his value on the open market. So a team should be predicating their option year dollars towards a "dead cat bounce" kind of year.

Say a $8 million AAV type of player wants a 3 year deal with a 1 year player option. You should structure the deal as 9, 10, 11, 3 if you can swing it.

Scenario 1: If the players plays at his $10 million level, he'll opt out and you can bid for his services again.
Scenario 2: If he's good in years 1 and 2 and struggles in that contract year, maybe he'll bite and take your $3 million and then return to his $10 million form.
Scenario 3: If he's absolutely terrible all 3 years, he'll take your option but maybe he'll still return to form or at least be trade bait, and worst case scenario, you're out your 3 million.

Basically, teams should try to get all their AAV into the guaranteed years anyway to minimize Scenario 3, which definitely happens way more than Scenario 1 ever seems to.

No, you should structure the deal 0, 0, 0, 33, if you can swing it. This does two things. First, it gives you 33 million dollars that you can invest for three years in order to pay that salary the fourth year. The other is that it guarantees an AAV of 4/33, the only way you get a rate that good on your proposal is if he's bad during some or all of the first three years.